India’s largest telecom network, Airtel with over 263 million subscribers under their belt has posted a massive 65 percent downturn in their December profits standing at Rs. 504 crores when compared to Rs. 1117 crores at the same time last year.
The telecom network also reportedly faced notable loss in terms of both revenue and performance. The income of the network fell to Rs. 23,335.7 crores from Rs. 24, 671.5 crores saw in the last quarter. The primary culprit for this downfall in the revenues of the network will be the rise of Reliance Jio and PM Narendra Modi’s demonetization rule.
Airtel has posted a net revenue of Rs. 1023.40 crores and Rs. 23, 897.20 crores since the last quarter, dated from September 30, 2016.
The operating profit is dropped by 9.5 percent from last quarter, but when considering year-on-year review, the operating profit rose by 1.2 percent. The exceptional cost also saw a downfall from Rs. 340.50 crores to Rs. 204 crores for the complete year.
The voice volumes have been raised by 5.4 percent compared to the previous quarter to 330.2 billion minutes. However, the average revenue per user for the voice volumes declined by 8.4 percent and is now standing at Rs. 172 per user.
The data volumes also have seen a downfall with per MB average net value dropped by 10.5 percent and is now standing at 17.97 paise. Having said that, Airtel saw the revenue loss only in India, but not in other markets. The company recorded a revenue growth of 1 percent with a revenue of Rs. 5,355.9 crores in Africa.
“The quarter has seen turbulence due to the continued predatory pricing by a new operator. The present termination costs at 14 paise which are well below cost have resulted in a tsunami of minutes terminating into our network. This has led to an unprecedented year on year revenue decline for the industry, pressure on margins and a severe impact on the financial health of the sector.”, said Gopal Vittal, MD and CEO, India & South Asia of Bharti Airtel.
With the increasing craze for Reliance Jio and competitive offerings from other telecoms, it is interesting to see how Airtel will manage to increase their revenues this quarter and financial year.